Recently, a dean of global leadership at one of the largest automotive companies in the world set out to evaluate whether the situational leadership training it delivered to its employees was, in fact, driving performance. The training content and delivery were consistent, but the geographic locations, business functions and key performance indicators involved were diverse. From an evaluation perspective, it looked like a monster. How could he and his team identify impact and return on investment (ROI) for a single leadership program delivered to such a large, diverse and geographically dispersed group of participants?
Here’s the quick and simple answer: He didn’t try to measure ROI for the entire group at once. When it comes to ROI, it’s best to start small, with one business function; isolate the impact of training on a specific set of performance indicators; report your business results and ROI; and then watch how interested others will be to run a similar ROI calculation for their business group or location.
If you start small and focus on a few tangible (and hopefully monetizable) business measures, it’s much better than trying to say, “Here is the ROI of training for the entire company.” If you wait until you have one universal dollar ROI, you’ll never finish your study. And if you never finish your study, you’ll leave everyone scratching his or her head for years, wondering if the training is actually working for anyone. Long story short: If you try to measure everywhere, you won’t truly measure anywhere.
The next question you might be thinking is, “Won’t leaders in different business units and in different geographies be frustrated that I didn’t tell them their specific ROI? They paid for the training as well. Don’t they want to know the impact?”
Of course they do, and you’re going to tell them all about that impact. You’ll be able to tell them whether their participants liked the training (level 1), whether they learned anything (level 2) and whether they improved their key leader behaviors (level 3). You might even be able to share learners’ improved performance metrics on the job (level 4). The only metric you’ll be saving for a future study is their specific ROI. Just let them know that when they provide you with all the right metrics and financial values, you’ll be able to give them that glorious level 5 ROI. In fact, you’ll even be able to tell them about level 6, which is critical information about what helps or hurts the transfer of learning back on the job.
To give you a quick cheat sheet on this approach, here’s what and how that car company measured its leader training:
Level 1: Did they like it? The company sent all participants a one- or two-minute survey to gauge their satisfaction with program content, the facilitator and other aspects of the training.
Level 2: Did they learn anything? The survey included a few questions about new learning and knowledge.
Level 3: Did they improve their behaviors? A five- or six-minute survey, sent two months after the training, enabled the learning team to examine behavior change and improvement across the enterprise. The participants’ direct reports also completed a survey, and managers received multi-rater feedback to corroborate that they actually improved their leadership behaviors.
Level 4: Did they impact the business? The learning team used the average reported business improvements, including the direct reports who were positively impacted by learners’ improved leadership skills.
Level 5: What’s the ROI? The learning team reported ROI only to the collections business group in one particular location, which provided the team with in-depth numbers on specific performance metrics, as well as financial values for each of those metrics.
Level 6: What maximizes ROI? For level 6, the learning team told all business leaders across the enterprise that their ROI could increase by up to 30% if participants had strong support from their immediate managers back on the job.
Results of all levels are captured in the diagram below:
There you have it: great results that the dean would never have reported if he had waited until he had all the business metrics and all the financial values for all the disparate functions across the entire enterprise. Does every group know its exact ROI yet? No, but does everyone have a clear sense of the value and impact this situational leadership training brought to leaders across the enterprise? You bet! The learning team showed stakeholders how leaders and managers who change their behaviors can have a huge impact on their employees’ performance. And it told them how to maximize that impact in the future.
Could I say that it ultimately drove performance? Yes, but I don’t want to use that pun again, so let’s just say that when it came to training impact, the rubber really hit the road!